Bad Candidate Experience Is Expensive

The recruiting process is essential for every business as it helps in finding the right talents that are going to help the company grow and be more successful. And as all business owners know, finding these talents is not an easy task.

In fact, it is not easy at all, as this is a process that takes time and resources. If you are not a large and well-known company, it is quite difficult to attract and retain talents because you need to prove that you can offer an excellent working culture and opportunities for the future, besides just providing a decent paycheck. And even for companies with good reputations, the recruiting process can cost a lot of money.

How you treat your candidates is essential, not just to them, but also for the success of your business.

Candidate Experience Influences Your Business

As you already know, when searching for new talents, some will fit the job description better than others. But what will happen to those who are not right for the job or don’t have the relevant experience? Well, believe it or not, these candidates, in particular, can impact the development of your business.

How can an unhappy candidate have so much power over your company, in spite of not getting to work within the company? It is all connected to the way this person sees your company based on the experiences he or she had during the recruiting process. During the interview process, you present your company and your brand to candidates.

If a candidate has been disappointed by the way he or she was approached or treated, they will be less likely to purchase products or services provided by your company. The North American CandE Awards research conclusively demonstrates that 46% of candidates who believe they have had a “negative” overall experience say they will take their alliance, product purchases and relationship somewhere else.

An unhappy candidate could also make negative remarks about your company, chasing away potential talents and clients. In fact, 27% of candidates following a bad experience would “actively discourage others to apply.” (Source: LinkedIn)

This is not a mere assumption; there are companies out there that felt their sales figures reflected the unhappiness of some recruits. A good example would be Virgin Media where they calculate how much the bad candidate experience costs them.

They came to this calculation: if there were 123,000 rejected candidates each year, and 6% canceled their monthly Virgin Media subscription, they would end up with about 7,500 cancellations. Multiply that by the £50 ($60) subscription fee and within 12 months, and Virgin Media was losing £4.4 million per year, the equivalent of $5.4 million. (Source: LinkedIn)

Thus, if you didn’t consider candidate experience relevant to your business, you need to think twice and do your best to provide excellent experiences to all of your candidates.

Candidate Experience

You need to understand that not only do your employees act as ambassadors for your company but the candidates do as well. The experience they had during your recruiting process will make them talk and share on social media, so it would be recommended for this experience to be a positive one.

Candidates will start talking about their experience with their friends and family, and, believe it or not, they are more prone to sharing their negative experiences than the positive ones. If a candidate had a bad experience, there are high chances that he or she will not apply for a job in your company in the future and won’t recommend it to others either.

Considering the effect that can be created by sharing an opinion or experience on social media, you can tell that things could get very ugly for your company if one of your candidates had a bad experience.

What Leads to a Bad Candidate Experience

Communication is a highly valuable aspect for candidates. They complained about the quality of communication during the recruiting process. You need to make sure that this doesn’t happen by doing your best to communicate with your candidates as well as you can.

Even if a candidate is not ultimately recruited, most certainly he or she will appreciate your communication efforts. Also, providing follow-up at the end of the recruitment process counts a great deal when it comes to candidate experience. Approximately 65% of candidates say they never or rarely receive notice from employers. (Recruiting Stats to Know in 2017)

How Expensive Is It Not to Follow Up

I couldn’t find any math equation that could help me to calculate how much not giving feedback and bad experience costs companies. That’s why I created one. (Of course, if you have better one, just share it in the comments of this article or contact me)

Math equation:

(NCWF * CPA) + (NCWF * TA * PP * ARPC) = Your Potential Loss per Year

All the costs and numbers are an example based on surveys and public data.

Case study: You have 10,000 candidates per year, reviewed 7,000 and hire 70 candidates. And you never checked or gave feedback to 3,000 candidates.

Legend:

TA = Target Audience — How many candidates that applied could also be your potential customers that could buy your product or service? If you are Coca-Cola, your TA will be almost 100% because most of your candidates are prospective customers of your soft drinks. But if you are selling “Industrial Machinery” your target audience of potential customers from all candidates that applied to your roles will lower. The number of people who are going to buy your product or service and are also your candidates will be 0,01% or lower.

PP = Purchasing power (Percentage of people that will choose your competitor instead of you)

(46 % said, “I will take my purchasing power somewhere else.” Data from North American CandE Awards research)

ARPC = Average Revenue per Customer

Average revenue per customer is information that you can find from your sales team. For this example, I am going to use: $ 2,000 USD per customer.

The “0,10” is there only for an example of the number of candidates that are also potential customers (check the TA above).

As you can see from the math equation, not giving feedback and not informing candidates of the outcome of an interview could cost your company $ 321,000 USD per year.

If you have 10,000 candidates and you process 7,000 of them just to hire 70 people, in the 3,000 candidates that you didn’t contact you could have another 30 potential hires.

However, if you plan to hire these 30 new people, in many cases your recruiters will open new requisitions and wait for new candidates, and they will also approach new candidates on LinkedIn, etc. and not utilize the candidates from the previous roles.

Based on their experience, candidates from their ATS won’t be interested or available when they reach them. If you have a terrible experience with a company and, after three months, some recruiter from that company contacts you, how excited about the job opportunity with that company you will be?

And acquiring new 3,000 candidates will cost you (CPA * Number of candidates).

In this case $ 45,000 USD.

I am aware that this math equation has many variables, but, as I said before, I didn’t find any that I could use, so that is why I created one.

Statistic About Candidates

Keep in mind that not giving feedback to candidates will not only hurt your brand and cost you money, but it will also lower your talent pool. 27% of the candidates whose experience was negative would “definitely not” apply to the firm again (although 6% still would); 27% would “actively discourage others to apply.” (Source: LinkedIn)

And thanks to the 27% of candidates your talent pool will be smaller, and the CPA will go up because it will be harder for you to attract more people into the process next time, especially when you are going to be hiring for similar roles.

Another study shows that 80% of job seekers say they would be discouraged to consider other relevant job openings at a company that failed to notify them of their application status. They would be 3.5 times more likely to reapply to a company if they were informed. (Source: Candidate Experience Study)

Conclusion

Having all of this in mind, make sure you follow up with your candidates after the recruiting process ends. Every ATS can send all candidates rejection templates, and it will take you only a few minutes to send these rejection e-mails. Don’t worry; most people will understand that they weren’t accepted for a particular position if they diplomatically receive the news together with an explanation of why they weren’t accepted.

Honesty is highly valuable in such cases, allowing a person to know where to work on his or her personal development because, who knows, maybe he or she will become the candidate you’re looking for in a year or two from now.

Also, sending follow-ups is not complicated or time-consuming. You can set up special templates for this kind of e-mail, just make sure that each candidate receives an e-mail that is personalized for them and not a general message. You need to create the e-mail in such a way that will make the person feel the message was written just for him or her.

As you can see, providing good experiences even to the candidates that won’t get hired is not difficult at all, if you are careful not to make the mistakes made by most company managers.

Next time you think you don’t have time to give feedback to all of your candidates try to consider how many resources you will need to invest for your next search and how much it will cost you not to give feedback to them.

Treat every candidate as you would your employee or your best customer because every candidate could refer a strong candidate even if they don’t get hired! And it costs $0.00 to respect your candidates and give them feedback.

The impact on employer brand can be difficult to measure, but give candidates a bad experience, and word can spread.

Jan is an author of a book “Full Stack Recruiter: The Modern Recruiter’s Guide” and creator of sites like Sourcing.Games, Recruitment.Camp and other projects. As a speaker and blogger, Jan believes that recruitment is a great field and he is constantly trying to make it better.